M/S Ramakant vs. State Of U.P. And Another

Held

The Court held that the electronic issuance of the show-cause notice on the common portal was not valid service, particularly after the cancellation of the petitioner's GST registration. The Court reasoned that once registration is cancelled, an individual may not be obligated or even able to access the common portal, thus remaining unaware of any proceedings initiated against them. This reasoning was supported by the Commissioner of Commercial Tax's Circular dated 07.05.2025, which directed subordinate authorities to ensure physical service of notice in cases where registration has been cancelled. The Court found no quarrel with this proposition, especially given the Standing Counsel's submission. Consequently, the impugned adjudication order was set aside. The Court directed the petitioner to file their final reply to the show-cause notice within two weeks, with liberty to apply for cross-examination or supply of documents. The adjudicating authority was directed to decide such applications before fixing a hearing date, provide at least 15 days' notice for personal hearing, and pass a reasoned order within one month, concluding proceedings by 31.12.2026.

Facts

The petitioner challenged an adjudication order dated 20.04.2024, passed by the Deputy Commissioner, State Tax (SGST), Prayagraj, for the Financial Year 2018-2019, under Section 73 of the UP GST Act, 2017. The petitioner's primary contention was that the show-cause notice, issued electronically on 27.12.2023, was not effectively served, leading to an ex parte adjudication. The petitioner only became aware of the proceedings when recovery actions were initiated. A Circular dated 07.05.2025 from the Commissioner of Commercial Tax, U.P., mandated physical notice service for individuals whose registrations were cancelled, acknowledging that such individuals might not be actively monitoring the common portal.

Key Issues

1. Whether the electronic issuance of a show-cause notice on the common portal constitutes valid service when the petitioner's registration had been cancelled, thereby disabling them from accessing or being obligated to monitor the portal? (Question of law) Petitioner's argument: The petitioner argued that due to the cancellation of their GST registration, they were unaware of the adjudication proceedings initiated via an electronic show-cause notice. They contended that the subsequent recovery actions were the first indication of the ex parte order. They relied on the principle that service must be effective and that a person whose registration is cancelled cannot be expected to monitor the portal. Revenue's argument: The learned Standing Counsel conceded that in light of the Commissioner's Circular dated 07.05.2025, which mandates physical service of notice in such circumstances, there could be no dispute with the petitioner's proposition regarding the inadequacy of electronic service.